Premier Doug Ford is trying to balance the Ontario budget the same way former Liberal premier Dalton McGuinty did and it’s likely to fail, says a new report by the Fraser Institute.
The problem, according to the study by Toronto Sun columnist Ben Eisen and Steve Lafleur, is that Ford’s 2019 budget relies mainly on increased government revenue, rather than significant spending reductions, to gradually balance the provincial budget in five years, similar to what McGuinty tried and failed to do in seven years, starting in 2011.
“When it comes to the province’s spending trajectory, approach to deficit reduction and personal and corporate income tax policy, the new government has embraced strategies similar to those of its predecessors” the report concludes.
“(T)he 2019 budget falls well short of what would be required to eliminate Ontario’s deficit in a timely manner.”
“You don’t have to look too far in Queen’s Park history for examples where a government’s plan to slowly balance the budget didn’t succeed,” said Eisen, a senior fellow at the Fraser Institute — a fiscally-conservative think tank.
“These go-slow approaches are risky and often don’t come to fruition because they rely on forces beyond the government’s control — such as continued revenue growth — and are easily derailed by an economic slowdown or recession,” said Lafleur, a senior policy analyst with the Fraser Institute.
“What works is government moving quickly to bring spending in line with available revenues.”
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